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Paramount Beats Musicians Guild in Lawsuit Over Outsourcing Film Scores

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A judge figures out the meaning of "producer" and "employer" in Hollywood.

On Wednesday, a California federal judge handed Paramount Pictures a summary judgment victory in a lawsuit brought by the American Federation of Musicians of the United States and Canada over the score to the upcoming film Same Kind of Different as Me, starring Renee Zellweger. The ruling figures to be a very important one in future labor disputes between studios and guilds as the litigation explored a gray area of law — whether studios are joint employers — that goes beyond the music for a single film.

AFM filed its complaint in June 2015 with the claim that Paramount has breached the terms of a collective bargaining agreement that requires that films produced in North America shall be scored there. Same Kind of Different as Me, based on a novel by Ron Hall, was scored in Slovakia.

What made this case a particularly fascinating one to watch was that the parties went to war over the meaning of a "producer" and "employer" under guild agreements. Paramount denied being either, and under its theory, that meant the movie had no obligations to be scored in North America.

According to the facts as laid out by the judge, Hall and two fellow screenwriters began raising money for a film version. They brought in producer Darren Moorman, who raised $6.5 million and began the process of casting. A single-purpose entity called SKODAM Films LLC was set up, and the filmmakers began looking to see who might want to buy distribution rights.

Disruption Entertainment and its owner Mary Parent were engaged and began working on the pic as producers. Paramount had a multiyear first-look deal with Disruption and Parent, who worked on Paramount's studio lot (and is now an executive at Legendary). In October 2014, Paramount and SKODAM entered into a co-financing and distribution agreement whereby Paramount would put up 40 percent of the film's budget and obtain a fractional interest in the copyright to the movie.

Shooting for the film occurred in Jackson, Miss., in the final months that year, and during that time, Paramount was involved, among other things, in choosing castmembers. It was Moorman, though, that appears to have spent the most time on set.

The first big question this case raised was whether Paramount "produced" Same Kind of Different as Me. On this front, the studio narrowly lost.

Paramount argued that the term meant "made," "shot" or "filmed" in relation to "principal photography," while AFM asserted that under the collective bargaining agreement, anyone financing at least 25 percent of the picture is considered a producer.

U.S. District Judge Dolly Gee ruled against AFM's interpretation, finding it nowhere in the CBA and states that there is "no genuine dispute that the meaning of the word 'produced' in Article 3 [of the relevant CBA] is 'made” or 'shot.'"

However, that doesn't end the issue.

"Yet, even under Paramount’s 'narrow' definition of 'produced,' the Court finds that AFM provided enough evidence to create disputed issues of fact as to whether Paramount 'made' or 'shot' Same Kind of Different As Me," Gee wrote. "For instance, throughout the making of the film, Paramount made weekly payments to SKODAM Films in line with its commitment to fund 40 percent of the Motion Picture’s budget. SKODAM Films, in turn, submitted weekly invoices to Paramount regarding costs spent. Thus, Paramount was far from being a passive investor. Paramount executives received film dailies (e.g., 'the filmed output for each day') from SKODAM Films and Disruption each day, on which Paramount executives reviewed, discussed, and commented."

Paramount thus failed to defeat the lawsuit on the basis that it didn't produce Same Kind of Different as Me, which ironically, is a film about a relationship. Nevertheless, it won the lawsuit on another front.

The CBA provision in controversy applies to those "employed by the producer," so the second big question raised by the case is who is the "employer." Gee noted there's nothing in the CBA dealing with this in instances of plural "producers" or "co-producers."

But she wrote that "SKODAM Films undisputedly did the bulk of the work making or shooting the Motion Picture" and Paramount "cannot have breached the CBA because there is no evidence presented that it either directly or indirectly was the joint employer, much less the employer, of the myriad employees working on the production of Same Kind of Different as Me, including musicians who worked on the Motion Picture’s score. Nor is there any evidence from which the Court can infer that Paramount was the alter ego of SKODAM Films or that SKODAM Films was its agent for purposes of hiring and firing."

The judge shrugged off AFM's arguments pertaining to Paramount's influence over the film, saying there's no evidence that the studio "had the right to control the day-to-day activities of the Motion Picture’s cast and crew or that it exercised more than minimal control over the film’s shooting."

Here's the full opinion, which will likely be read closely by entertainment attorneys and could influence how productions of films are conducted as well as negotiations on future collective bargaining agreements.